Stablecoins takes the stage at the first hearing of the Senate’s First Assets Subcomm Committee
Stablecoins and Congress’s role in responding to the future law of digital assets took place on stage during one of the first Senate banking committee’s hearings focused on what a regulation of crypto regulations looks like.
Wednesday’s hearing, framed as a jump-off point for further action in Congress on digital asset regulations, was the first hosted in the new digital assets subcomm Committee of Banking and Led by Wyoming Republican Cynthia Lummis, A long crypto proponent.
“We are in the end of finally creating a bipartisan framework for both stablecoins and market structures,” Lummis said in his opening statement, referring to the draft law he introduced to the New York Democrat Kirsten Gillibrand as a natural counterpart to the Financial Change and Technology of the Chamber’s Law.
Stablecoins will be the first on the committee’s agenda though, he said, Echoing statements The White House Crypto and AI Czar David Sacks and South Carolina Republican Tim Scott, who filled the general banking of the Senate.
Former CFTC seat Timothy Massad, one of the four witnesses of the hearing, told lawmakers to focus on the Stablecoin law at the moment and postpone any efforts in the market structure “for years.”
“For four years, the crypto industry has called the SEC and CFTC to develop policies and guidelines and stop regulating through implementation; it is now happening,” he said. “The SEC has dropped implementation cases and has launched a crypto work force to deal with these issues. We must let the issue of this regulatory issue move forward before hurrying to re -write the security law.”
Existing measures to update market structure regulations to address crypto have the potential to “create more confusion than clarity,” he added, especially in determining how a digital possession could be a security, commodity or other.
These proposals can interfere with existing security laws, especially if they address decentralized finances.
“That term is used to describe many non -decentralized things,” Massad continued. “Almost always some control vectors. And although a process is decentralized or automatic, it does not mean that it must be exempted from regulation.”
Virginia Democrat Mark Warner has asked the panelists to discuss the possibility of Stablecoin users who perform the processes of your customer-noticing that a giver can perform KYC but a stablecoin can move between the wallets without intermediate shifts passing through a KYC process.
“I wanted to get to a framework of regulations that work, but I’ve seen – reflecting what others said from the classified side – Oh My Gosh, a whole bunch of bad things,” Warner said. “So help me find out, and I recognize (for) some people, the anonymous and the disintermediation role played by the blockchain, but how can we put some minimum protection from the one who gave it all back to Fiat?”
Lightspark co-founder and legal official Jai Massari noted that even self-customied wallets do not conduct KYC, “there is an irreversible on-chain record of transactions that can be monitored, not only of giving, but (through) third parties, including law enforcement.”
While mixers and other tools may be able to obfuscate transactions, custodial wallets are still conducting KYC at the end of a chain of transfers, he said.
“I agree that we need to continue, as the industry has done, to produce new tools to address these issues,” Massari said.
